Gold Prices at 1-week lows as dollar remains supported

Stock markets dipped after a long winning run on Wall Street ended overnight, while the dollar gained momentum on Wednesday as yields on U.S. Treasury debt headed for highs not seen in four years.

Gold extended its fall on Wednesday as the dollar remained strong on rising treasury yields, while investors awaited the minutes of the U.S. Federal Reserve's last policy meeting for cues on the pace of interest rate hikes this year.

Meanwhile, holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.39 percent to 827.79 tonnes on Tuesday from 824.54 tonnes on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.41 percent lower, while Japan's Nikkei lost 1.01 percent.

The dollar index, which tracks the greenback against a basket of other key world currencies, rose 0.7 percent, continuing its rebound from three-year lows. Earlier in the day, prices touched the lowest since February 14 at $1,325.20 an ounce.

The U.S. Treasury on Tuesday sold $96 billion of bills at yields unseen since 2008 and is preparing to sell a further $55 billion of short-term securities later in the day as it works to rebuild its cash balance with record-sized sales of short-term securities.

Tuesday's auctions made up more than half of the $258 billion in Treasury debt supply scheduled for sale this week, which is projected to raise almost $48 billion in new cash for the government.

Concerns about an expected surge in federal borrowing have escalated after a major tax overhaul late past year that is estimated to add up to $1.5 trillion to government indebtedness.

In recent months, the USA currency has edged lower against the yen and other major currencies, as optimism from higher USA interest rates was offset by bearish factors, including concerns over the country planning a weaker dollar policy.

Analysts said the auction would be a key gauge of worldwide investors' appetite for USA assets.

Carrying over its strength from overnight trading overseas, the dollar moved on a firm note around ¥107.30 in early Tokyo trading.

"We are seeing the dollar being bought back after last week's slide". The euro was last 0.58 percent lower at $1.2335. The dollar's upward march against the yen would gain momentum if hopes for an acceleration in the USA central bank's interest rate hikes grow without battering the US equity market, the official said.

In late NY trading, the euro decreased to 1.2337 dollars from 1.2408 dollars in the previous session, and the British pound decreased to 1.3988 dollars from 1.4005 USA dollars in the previous session. The New Zealand dollar gained 0.07 percent to 0.7342.